Green Deal and cars: European Commission chooses haste over prudence – Newsletter Editorial July 2021
Taking the temperature of the automotive industry, I’d say that the word ‘deal’ has lost quite some of its shine. A deal in the political sense typically holds a promise: one of working together, making a pact. Not so in the EU Green Deal and its measures for reducing CO2 emissions from cars and vans. This deal comes in the form of a ’ban’.
Ursula von der Leyen and her team have sought to use inspirational language to confront Europe’s challenges right from the start of their mandate. But it is difficult to see the bold headline statements on innovation, technology openness and inclusiveness adding up with their legislative translation on paper, and valid concerns tend to be addressed on the basis of belief, not substance.
Several governments voiced fears of rising costs for mobility and heating for their citizens
Take the idea of a dedicated emission trading scheme (ETS) for transport and buildings. Several governments voiced fears of rising costs for mobility and heating for their citizens. Green Deal Commissioner Frans Timmermans chose to respond by turning the question around. Of course he expected the proposals to be critically received, he said. But think for a moment of the cost of not doing anything.
Let’s think also, for a moment, of the cost of getting it wrong.
As regards CO2 and cars, Timmermans had stated in earlier interviews and stakeholder meetings ‘not to be a friend of banning technology’ and to be aiming, instead, to give ‘a clear signal of where to go’. Following his line, the now published legislative proposal for cars and vans actually claims to be technology neutral.
But it is not. A 100% reduction target by 2035, for emissions coming out of the vehicle tailpipe, de facto prescribes what to produce: electric vehicles only. It discards the contribution that renewable sustainable fuels can make. The internal combustion engine can be climate neutral when running on sustainable renewable fuels. The battery electric vehicle is only climate neutral, when charged with renewable electricity.
Turning vision into tangible measures is the hard part and needs many hands working in a concerted effort
From an engineering perspective, it is very difficult to conceive why options and technologies that can help meet the objectives more quickly and efficiently would be discarded, only because, politically, it seems difficult to go that route. Turning vision into tangible measures is the hard part and needs many hands working in a concerted effort. The recent flooding in parts of Europe has once more emphasised the urgency, but not only of the need for climate action: the importance of robust and resilient infrastructure networks was underscored too.
The Commission has chosen haste over prudence. The horizon given to the automotive industry in Europe is 2035, not 2050. For an industrial transformation of such magnitude, this is unprecedented and a reason for grave concern. For vehicle manufacturers and component suppliers, 2035 is in fact tomorrow. The typical life of a car’s model is 7 years with at most one update during this time. The manufacturing cycles of the industry are woven around this timeframe: the preceding design cycle lasts another 3-5 years on average. Each manufacturer sells multiple models, and they are redesigned and updated in a carefully calibrated sequence. Investment decisions are taken years in advance. People need to be trained and retrained.
The transformation needs to be staged together with the sector to avoid an industrial decline in Europe and upheaval for millions of livelihoods
The automotive industry is committed to climate neutrality in 2050, and believes this objective is realistic. However, it requires a transformation that needs to be staged together with the sector to avoid an industrial decline in Europe and avoidable upheaval for millions of livelihoods. Automotive suppliers design and manufacture all of the components and systems that are needed to achieve the ambitious goals for road transport. They are committed to continuing to do so in Europe. The automotive supplier sector is an innovation powerhouse and, with 1.7 million direct employees, on top of the 1.2 million employed by vehicle manufacturers, there is a lot at stake.
Europe looks set to give up on a competitive technology that will, in Europe and abroad, power mobility outside of cities for a long time to come, and that can be clean and climate neutral with renewable fuels and green hydrogen. The ‘Fit for 55’ package lacks recognition of the contribution renewable fuels can and will have to make in road transport. A technology-open approach would reduce emissions quicker and support European jobs and competitiveness.
The Green Deal offers a unique opportunity to set Europe on a consistent and coherent path towards climate neutrality. For vehicles, specifically, this would mean moving from a ‘tailpipe’ to a ‘life cycle’ approach. And this could be done within the current regulatory framework, putting us on target for 2050. Where electric mobility is the best and most economical solution it will succeed. The business case is growing fast, especially where there are incentives and charging points in place. But where affordability and charging infrastructure are not a given, there should be room for alternatives.
It is now in the hands of the European Parliament and the Council to evaluate the proposal. The earliest chance for adjusting course is the European Parliament’s report on the Sustainable and Smart Mobility Strategy, set for autumn. Automotive suppliers will continue to inform this important debate with first-hand evidence and smart policy proposals. The objectives are shared. Now let’s make it work.
Wishing you all a wonderful and replenishing summer break,
Sigrid de Vries,
Secretary General of CLEPA
In: CLEPA News, Environment & Energy, Growth & Competitiveness